Friday, May 07, 2010

Kevin Williamson is a shameless psychopathic liar.

He wrote an article in the National Review denouncing supply side voodoo economics. Amusingly, he accurately cited Arthur Laffer himself as an authority. Importantly, he admitted that most prominent Republican politicians declare their faith that tax cuts cause increased revenue *and* that they budget accordingly.

That's quite a bit of honesty for the National Review. However, having conceded the main points, Williamson chose to lie about history. He wrote

The Gramm-Rudman-Hollings Act of 1985, which enacted automatic federal spending cuts if the deficit exceeded predefined targets, went through hell, high water, and the federal courts before its provisions were allowed to kick in. But when they did kick in, they worked. They worked with a hard and furious vengeance: The deficit was reduced from $221 billion in 1986 to $153 billion in 1989, from 5.2 percent of GDP to 2.8 percent of GDP. In fact, Gramm-Rudman worked so well that Congress, facing real spending constraints for the first time, killed the act, replacing it with the toothless Budget Enforcement Act of 1990.

This is a lie. the budget Enforcement Act was significantly tougher than Gramm-Rudman-Hollings and it played a major role in the shift from deficits to surpluses (though not quite as large a role as the Clinton tax increase). Anyone who knows about the issues knows this. Rudman called Gramm-Rudman-Hollings a failure. Williamson is so determined to libel anyone who isn't as conservative as he is that he libels George H.W. Bush. The quoted claim is a flat out lie.

He also wrote " you don’t get Reagan tax cuts without Tip O’Neill spending cuts. " and more explicitly "Reagan and his congressional allies had an excuse in the considerable person of Speaker O’Neill." He's lying. He clearly isn't ignorant and knows that the spending in budgets proposed by the Reagan administration was very similar to the spending in actual budgets. He can also look up spending in Senate budgets and admit that the Republicans had a majority in the senate. Government spending didn't decline under Reagan and O'Neill was not the reason. Reagan wanted to shift spending from domestic programs to the military and he did. To put all the blame on O'Neill is to make a false claim. Williamson clearly knows the facts. He is lying.

This lie is not relevant to the current debate. Williamson lies from habit. He seems to enjoy it.

Another false claim in the voodoo article, which, unusually is relevant to the current debate is his distortion of CBO analysis. His point is that tax cuts without spending cuts are no good, like Friedman he claims they are impossible. However, when discussing the CBO estimates of the effects of tax cuts, he decides to temporarily ignore the issue of spending cuts. He notes that the CBO estimated that part of the revenue loss due to tax cuts is eliminated by increased growth. He neglects to mention that the CBO assumed spending cuts so that the debt did not explode. So they are discussing the effects of his proposed policy not of tax cuts without spending cuts. Also the CBO assumed that spending is pure waste. This makes it hard not to conclude that tax cuts combined with spending cuts would be good. The point is that no one can write a model in which debt builds up unsustainably forever (yes that's a tautology implied by the meanings of the words unsustainably forever). The CBO could model the effects of tax shifts without spending cuts. They didn't do that.

Williamson doesn't explain why he is opposed to deficit spending. He acts as if there are two goals -- a healthy economy and a low deficit. Sensible people would put all the priority on the first as deficits are not bad in themselves. They are bad because, they crowd out investment, they cause imbalances which can lead to crises and they imply higher taxes with higher dead weight losses in the future. Williamson won't convince anyone, least of all NRO readers, if he uses results from a simulation of combined tax and spending cuts to argue that tax cuts, with or without spending cuts, are good for the economy but not good enough to make up for uhm "the accounting deficiencies of government." Here he is clearly being honest. The problem is that he is not just a psychopath, he is also an economic illiterate.